Candlestick Investing

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Candlestick Investing
When it comes to investing in stocks, forex or options trading nothing beats candlestick patterns. When you become proficient at candlestick investing and recognizing these simple yet advanced patterns you learn to identify clear and concise areas for entry and exit that could not be identified otherwise. You can start with just the Top 10 Candlestick Patterns, learn those, learn to recognize them and begin to understand the underlying meaning behind the pattern. Dont look at the pattern as a picture but rather look to what the pattern means and why it means what it means. Only then will you develop expert insight. When it comes to candlestick investing there are a few hard fast rules you can learn right now. First, and definitely one of the most important candlesticks, is the Doji candlestick. Look for Dojis at the top of a trend and you will often find the end of an uptrend. Heres a shot of an up-trending stock where after a long move up doji patterns start to appear. The key is that price had a nice run up THEN the doji appeared signaling the end of the trend.

There is one problem with the image above and that is price did not reverse. It did hesitate and pull back a bit, but did not reverse. Did the doji fail us? No we just didnt find the right SET-UP. Lets take a look at another set-up using the same doji pattern. Remember candlestick investingrequires a thorough understanding of confluence. This is where we use multiple tools that point to the same probability. Like this. The first PROPER step in identifying a bearish reversal worth paying attention to identify either a bearish prevailing trend or set a proper trigger. Let the doji NOTIFY you but dont trade on that alone. Take a look

Candlestick Investing High Odds Trading

Notice here we are down trending and on strength we get a doji. Here is a more ideal place for bearish entry. As you can see this would have been a nice trade. Applying candlestick investing tricks to the previous chart we would have let the doji identify the potential reversal and then set a proper trigger like this

As you can see there are many ways to profit from candlestick investing. the key is understanding what truly is a high odds trade set-up and what is not. Use the form above to download and learn these patterns for free.

Candlestick Pattern and Eminis

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Candlestick Patterns and Eminis

By looking at a historical price chart, it is obvious that overall market movements are highly significant for the value of your holdings over a particular time period. This is particularly true for the Standard & Poors 500. Certain candlestick patterns, however, have been particularly useful in trading this index via S&P e-minis. You can use candlestick patterns and eminis together, and an

individual investor can ascertain a sense of market sentiment in order to optimize entry and exit points for profitable position undertaking.

Candlestick Patterns and eminis Using the doji with S&P minis

What appears to be particularly successful in the S&P e-minis market is the use of what is commonly referred to as doji candlestick formations. A doji, in essence, resembles a cross, a plus sign, or an inverted cross. Technical candlestick analysis attempts to recognize certain chart patterns over a certain time period to predict the probable future price movements of a particular investment. The various types of doji formations that can occur represent particularly successful patterns for successfully trading the S&P e-minis market. For this market, many technical analysts feel that the doji is the most important type of candlestick formation to recognize, as it can be shown to offer a signal of the beginning of a minor, intermediate, or major trend reversal. The inability to recognize these patterns for the S&P e-minis market could result in an individual investor being on the wrong side of a position.

Candlestick Patterns and Eminis Not all dojis are created equal
Generally, there are four types of dojis: common, dragonfly, gravestone, and long legged. Each one of these patterns will appear when the opening and closing prices are the same, such that there is no candlestick body but simply wicks. The distinguishing characteristics of each doji type are their visual appearance. In the S&P e-minis market, the formation of doji candlestick patterns is easily recognizable. Candlestick patterns and eminis work extremely well together. They will appear at times when there has been a previous significant movement in one direction or another. Their appearance represents a strong indication that the market is set to pause in the previous movement of the underlying long-term trend. After the appearance of a doji candlestick formation, more likely than not, a reversal in price action can be observed. The larger the wick is in this particular pattern, the more significant the signal for a price reversal is viewed by the market participants.

Candlestick Patterns and eminis Capitalizing upon market reversals The appearance of these types of candlestick patterns do not guarantee that a reversal in price action will occur, but they have been shown to be at least a highly probabilistic initial indicator of possible reversal action. As a result, when they are used with other technical analysis tools and indicators, they can be greatly beneficial in giving individual investors the opportunity to recognize optimal points of entry for the undertaking of trading positions. Any tool and indicator is only as good as the expertise and experience of the individual utilizing them. Candlestick patterns and eminis, the fact that these patterns have been used with great success by certain individuals for centuries warrant that they should be investigated and mastered by anyone who wants to improve his or her S&P e-mini investment results. Candlestick patterns and eminis are a common marriage among top futures traders. Where you have volume you have candlestick patterns that print highly predictable trade set-ups. Use these to your advantage for larger low risk profits.

Candlestick patterns have become the single most accurate means of identifying the ever obscure current state of price action . By virtue of open, close, high, low and those relative to the previous bar candlestick charts are the best way for a trader to identify excellent trade opportunities. Here is an example of the amount of data that can be gleaned from just one spot in time on candlestick charts

Candlestick Patterns
Realize that a candlestick pattern is simply a means of reading data on the chart. Whether you trade forex, stocks, options or futures it is a superior tool for technical analysis. Once you become familiar with the basic candlestick patterns you will quickly assimilate their meaning and easily interpret them. The patterns are basically intuitive and the learning curve is small. There comes a point where you will recognize market sentiment without even identifying a specific candlestick

pattern. No matter what system style or technique you may implement the fact is you will be that much more effective by making candlestick charts your tool of choice. The alternatives or archaic to say the least, and downright ugly once you get used to using Japanese candlesticks. Candlestick charts are the most widely used for of charting for good reason. With a little practice and help, it is actually the most intuitive process for understanding current and future price action. Using candlestick patterns always increases accuracy. The reason to increase accuracy is to increase profits. If you can get more accurate you can become more profitable. Heres a thought What if you could glance at price action and get a feel for price direction instantly? The fundamental difference between Japanese candlestick patterns and any other form of charting is simply that the candlesticks allow for immediate recognition of price direction and strength if only for the short term. If youre looking at a daily chart this can be more long term but relative to the time frame youre monitoring the assessment is generally short term based. We can look for additional patterns and other technical analysis to keep us in a more long term trading scenario.

Candlestick Patterns
Candlestick patterns are far and away the most intuitive, accurate means of determining price strength in any direction. Whether you trade stocks, options, forex or futures candlestick patterns should be the cornerstone of your toolbox for reading and determining any market forecast. Amazingly heres a great link about candlestick patterns great content for learning the basics of the candlestick patterns. If you want to learn more advanced stuff download my manual!

Candlestick Patterns and Pivots

Candlestick pattern trading techniques are used by astute traders and investors in every type of market. They represent tools that allow individuals to recognize opportunities presented more efficiently than a simple examination of the data as represented by a historical bar chart. The most professional and successful investors recognize that candlesticks offer more graphic presentations to allow for a rapid response to market developments.

Candlestick Patterns and Pivots The value of pivot points

The use of candlestick trading techniques in conjunction with other technical analysis indicators, such as pivot points, only helps to improve investing results. Pivot points are judiciously used by traders in order to identify strategic support the resistance levels. Pivot points represent important support and resistance trading areas, where the likelihood of a reversal in price movement is greatest, offering the opportunity for an investor to take on a position with a high probability of success. Pivot points have traditionally been used both when trading a range, or looking for a breakout. When used for range trading, pivot points identify levels where reversals will occur. Breakout traders, on the other hand, recognize these key levels as the point where trading activity needs to penetrate in order to signal a true breakout has occurred. Candlestick Patterns and Pivots Using pivot points to calculate entries and exits Upon the identification of the primary, secondary, and tertiary support and resistance levels through pivot point calculations, one has determined the various support and resistance levels for which an investor should consider trade entry or exit. Only upon prices reaching a certain pivot point level should the individual trader determine the proper position to undertake, regardless if it is long or short. Overall, trading below a pivot point level is considered a bearish indicator, while trading above is considered bullish.

Candlestick Patterns and Pivots Including pivot points with your candlestick analysis
Both Candlestick Patterns and Pivots, in and of themselves, have been used successfully by investors for a very long time. When used in conjunction, they complement each other and offer the astute trader far improved results. Developing a trading plan based upon candlesticks alone is a difficult process and offers the possibility of unsuccessful investments. As such, the more successful traders use candlestick pattern formations in conjunction with other techniques, such as pivot points, in order to make trading decisions. When certain candlestick formations have occurred and their indication can be confirmed by a subsequent pivot point analysis, (Candlestick Patterns and Pivots) the probability of a successful trade greatly increases. How an individual decides to use these two techniques in a strategy plan you develop will be greatly dependent upon the type of trading you envision undertaking, especially in the context of short-term versus long-term positions.Success in any endeavor is highly contingent upon the proper preparation of the participant. Through careful research and study of historical data, you can clearly ascertain that candlestick patterns and pivot point analysis can successfully produce profitable trading opportunities. When it comes to Candlestick Patterns and Pivots look to patterns like a morning star doji passing thru a daily or weekly pivot for a very high odds l;ow risk trade. Look for overextended bullish price action and a nice doji at pivot resistance far a nice entry short and a potential large move down your ability to combine the right Candlestick Patterns and Pivots together at the right time on the chart is

very powerful. Looking to build a good trading strategy start with Candlestick Patterns and Pivots and you will not be wasting your time I promise.

Candlestick Star
There are six basic candlestick star patterns that a trader needs to be aware of. These are Evening Doji Star, Evening Star, Morning Doji Star, Morning Star, Shooting Star and Stars in general. Each one has its own definition and means something different than its brother.

Pay Attention because the candlestick star is your friend!

Evening star doji

Candlestick Star Evening Doji Star This usually appears in a three candle pattern. It signals a reversal of trend. It shows that the second candle starts higher than the previous days close and trends up but drops back down, before closing, to the days opening price.

Evening star

Candlestick Star Evening Star The first two candles are long, white bodies followed by a star. The star is the first hint of a top. The third candle confirms a top and completes the three-candle pattern of the evening star. The third candle is a black body that moves sharply into the first periods white real body. An evening star should have a gap between the first and second bodies and then another gap between the second and third.

Morning star doji

Candlestick Star Morning Doji Star This is a three candle bullish reversal pattern. The first candle is a long black candle followed by a gap and doji where the market opened lower than the previous

days close. The final candle is a white body candle that closes above the mid point of the first candle.

Morning star

Candlestick Star Morning Star It is comprised of a tall, black body followed by a small body that gaps lower. The third day is a white body that moves well within the first candles black body. This pattern is a signal that the bulls have taken control. This indicates that the bears are in control with the downward trend. When the morning star appears, it means the sellers or bears are losing the battle to continue to drive the price lower.

Shooting star

Candlestick Star Shooting Star This is a one day or one candle pattern that usually appears in an upward trend. It opens higher, trades higher and then closes close to the open. This pattern is also called the Inverted Hammer. As with all stars, the color of the body is not important. A gap for this star is not always necessary.

Stars

Stars A candle that gaps away from the previous candlestick. The previous candle can be either white or black. Depending on the color of the previous candle the star candle gaps up or down and gives the appearance of being isolated from the previous candle.

Continuation Candlestick Patterns

There are basically 12 types of Continuation Candlestick Patterns.

Upside Tasuki

Continuation Candlestick Patterns #1 Upside Tasuki Gap A white candle after it gaps up from a prior white candles (Bullish). If this gap is not filled, it means the bullish trend has maintained control and if it is filled it means the bullish trend has likely reached the end.

Downside Tasuki

Continuation Candlestick Patterns #2 Downside Tasuki Gap This is found during a downward trend. A black candle will form after it gaps down from its previous black candle. If the gap does not fill, it means the bears have maintained and resumed control and if the gap is filled it means the bearish trend has come to a likely end.

On Neck Line

Continuation Candlestick Patterns #3 On Neck Line This is a bearish pattern that indicates the pattern does not quite reach the previous days close it only reaches its low. These occur during a down tend.

In Neck Line

Continuation Candlestick Patterns #4 In Neck Line This is exactly like the on neck line except for the fact that is closes at or slightly above the previous days close. This does not necessarily signal a change in trend and it is recommended that confirmation be made before making decisions based on this candlestick.

Thrusting

Continuation Candlestick Patterns #5 Thrusting Another pattern that is exactly like the on neck line except that it closes very close but slightly below the mid point of the previous days real body. The body of the thrusting candle is usually bigger than the bodies of the on neck and in neck lines.

Falling Three

Continuation Candlestick Patterns #6 Falling Three Method A five candle signal that uses one large black candle, three small black or white candles, and another large black candle. The three small candles are usually white given the fact that the beginning candle is black. It is the upward trend of the small candles that are important and their placement.

Rising Three

Continuation Candlestick Patterns #7 Rising Three Method This is the opposite of the Falling Three Method. It contains five candles in all beginning and ending with large white candles. The three small bodied candles progressively get lower and lower on the body of the first candle. It signifies a resting point for the market.

Side by Side White Lines

Continuation Candlestick Patterns #8 Side By Side White Lines This occurs during an up trend and the first white candle usually gaps considerably above the previous white candle. The second white candle opens at the previous days open and closes slightly below the previous days close. It signifies a pause or stalemate in the activity trend.

Separating Lines

Continuation Candlestick Patterns #9 Separating Lines This pattern is defined as lines that move in opposite directions. It appears when the market is experiencing an upward trend and suddenly there is a pullback and the price drops. The following session opens the same as it did the previous day and continues on an upward trend.

Mat Hold

Continuation Candlestick Patterns #10 Mat Hold Another five candle pattern that occurs when the third day body dips into the body of the first day after an up gap on the second day. It is a stronger continuation pattern than your Rising Three Method however, the price remains in the upper range of the white candle.

Three line strike

Continuation Candlestick Patterns #11 Three Line Strike This signal is also called the Fooling Three Soldiers. It is a four line pattern that appears during a confirmed trend and signifies a resting period for the market. It ends as a three white soldier pattern.

Upside Gap 3

Continuation Candlestick Patterns #12 Upside Gap Three Method This is another three candle pattern similar to the Upside Tasuki gap and occurring in a strong trend. If the trend is an upward trend it appears between two white candles. The final day opens in the top white body and closes in the lower white body. This, the final candle, fills the gap between the two white bodies.

Continuation Candlestick Patterns Conclusion

When it comes to Continuation Candlestick Patterns these are all you need to know. Continuation Candlestick Patterns can be your best friend. Some of the lowest risk trades you will find will bt he result of observing a trend as it fails to fail but instead continues into a wave 2 or 3 impulse wave and these Continuation Candlestick Patterns will prove to be your key to pinpointing these profitable set-ups.

Forex Candlesticks

The use of Japanese candlesticks for trading stocks and commodities is quite common. In the foreign exchange market, however, many investors wrongly believe that as this market is, in essence, a 24 hour interbank trading market, one cannot truly determine opening and closing prices in order to produce candlestick charts. As such, candlesticks can actually become a hidden advantage for an investor with the proper perspective.

The 24 market is irrelevant to Forex candlesticks

The fact that currencies are traded around-the-clock is irrelevant. For an FX investor who wants to use candlesticks, one would simply need to create an artificial market session relevant to the currency pairs under consideration for trading purposes. The data is available and the technology exists such that an individual can carve out the relevant time period necessary in order to produce opening, high, low, and closing prices. Based on this time period, an investor will be able to produce candlestick charts and recognize the patterns and signals that are generated within the created market. In fact, because of this ability, the investor is able to create a market that is truly relevant to the currencies. As a result, the trader can produce a session based upon the overlapping activity of the two currencies when both markets are open in the respective countries involved. It is at this time the greatest activity is occurring and consequently, the most relevant price data information for investment decisions should be taken under consideration. Trading in Europe as regards to the Japanese yen and American dollar exchange rates, which would be very light in the first place, would also mask the true market trends. Forex candlesticks are just as relevant as any stock price chart. You can achieve the same accuracy and reliability as you do with stocks.

Using the Forex candlesticks pattern to identify price activity

Once the relevant market trading periods are isolated and the charts are produced, the candlestick patterns recognized will be more relevant in order for the trader to identify the forces in place driving price activity. The use of candlestick charts is an extremely popular technique used in most markets as a forecasting tool. Most patterns are easily recognizable and can be learned by anyone in a relatively short period of time. The individual patterns and formations that arise represent the psychological character of the market. They reflect upon the emotions of the traders and have been shown to clearly be able to predict the probability of whether prices will rise, fall, or reverse their direction. Candlesticks do give Forex traders an edge Given the misconceptions concerning the foreign exchange market, forex candlesticks as an indicator are underutilized, and therefore, offer astute individuals the possibility to have an advantage over counterparts concerning the recognition of pending bearish and bullish price movements. As with all analytical indicators, the effectiveness of the use of forex candlesticks in the investment activity of foreign exchange markets will be dependent upon the experience and skills of the individual trader. They represent a powerful tool for successful investing in foreign exchange, especially when used in conjunction with other investment research techniques. For over 300 years, investors have used candlestick chart formations for their benefit. There is no reason why a foreign exchange trader cannot do the same. In fact, given the misconceptions and myths commonly associated with the Forex markets, candlesticks actually do represent a hidden weapon.

Japanese Candlesticks
If you want to become a successful trader you need to learn the art of applying Japanese candlesticks to your trades. When you combine individual Japanese candlesticks together you get what are commonly called candlestick patterns. These patterns provide clues as to the direction price might take next. When it comes to making attempts to predict where price may move to next we need as much information about price as we can possibly get. We need pertinent information that is important to right now and in the future. This is where Japanese candlesticks combine to form predictable patterns that foretell what is likely to happen at least for the short term. For example. Here we have a series of candlesticks that form a morning star doji. Without getting into any technical indicators that may support a bullish forecast lets look at the Japanese candlesticks together and the morning star doji pattern that they form. This pattern consists of a bearish move down, followed by a doji star indicating an end of the prevailing trend down, then a bullish candlestick up that penetrates to at least the half way point of the candlestick prior to the doji star

Japanese Candlesticks Example

Japanese Candlesticks Are Superior

This is why Japanese candlesticks are superior to any other form of charting for stocks forex or any instrument. You initially see the bearish strength. Then you get a doji star that tells you that the bearish trend is weakening. The very next day price reverses and rallys past at least the 50% mark of the first candlestick in the pattern. This is just one example of why Japanese candlesticks are the first choice among the top traders in the world. When you really get into the advanced patterns you will be amazed at the accuracy provided be this superior analysis. To get started learning at least the most useful Japanese candlestick patterns visit my page titles Top 10 Candlestick Patterns here you can start on the path to understanding the meaning behind the patterns and how they work. Always keep in mind that Japanese Candlesticks are going to be more valuable to you once you understand them intuitively. The good news is that these patterns are intuitive from the start so the learning curve is brief. The key is the underlying meaning in the pattern, understand the meaning not just the pattern and you are off to the races.

Top 10 Candlestick Patterns

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Top 10 Candlestick Patterns

There are hundreds, if not thousands, of candlestick patterns that have been identified and used by investors to enhance trading performance. Candlestick indicators are best used in conjunction with other analytical tools in order to produce optimum performance. Here are the top 10 candlestick patterns which should be considered by all traders for their investment activities are the following: The top 10 candlestick patterns are the patterns that are found most often and have proven to be the mot reliable.

The top 10 candlestick patterns #1 Dark Cloud Cover: This is a two-day formation which arises when the candlestick formed on the first day has a long white body followed by an opposite colored candlestick, which opened at a new high only to close below is the midpoint of the previous days trading. This pattern is considered a bearish reversal signal.

The top 10 candlestick patterns #2 Doji: When the opening and closing price are essentially the same, the candlestick formed resembles a plus sign, cross, or inverted cross and is referred to as Doji. It represents indecision on the part of the market, and is interpreted by traders that a turning point is imminent.

The top 10 candlestick patterns #3 Engulfing Pattern: This is a two-day pattern where the first days body is smaller than the subsequent candlestick, and they are both of opposite colors. This pattern is considered bearish when it appears at the end of an uptrend and bullish when it occurs in a down trending market.

The top 10 candlestick patterns #4 Evening Star: Commonly regarded as a bearish reversal pattern, this three-day pattern consists of a long white body, followed by a smaller gap up candlestick, with the third and final day closing below the midpoint of the first day. As you can see the top 10 candlestick patterns are easy to recognize and understand. Try and look at the patterns and understand them as opposed to memorizing them. Meaning try to understand why price is likely to follow the pattern. If you want a fasttrack into candlestick pattern trading, study theses top 10 candlestick patterns and you will be well on your way to applying the most effective candlestick patterns to your trading. For example the morning star doji price is coming down Price gaps down a little and then demonstrates a slowing of this falling trend The next day it gaps up and shows strngth. This is bullish

Top 10 Candlestick Patterns

The top 10 candlestick patterns #5Hammer: When trading occurs significantly below the open, but ends well above the low and closes as its high, the candlestick formed has only one tail below its body. When this formation occurs during a downtrend, it often signals a reversal.

The top 10 candlestick patterns #6 Hanging Man: Identical to the Hammer, this candlestick pattern occurs during an uptrend, and signals a continuation of the price movement.

The top 10 candlestick patterns #7 Harami: This is a simple two day candlestick pattern that has a relatively small body on the second day that is completely surpassed on both sides by the previous days candlestick and is always of the opposite color. It usually occurs during a minor correction in a bear or bull market and signals that this temporary uptrend or downtrend is reaching an end, and the underlying trend will continue. It is especially considered a strong indicator when it appears together with low trading volume.

The top 10 candlestick patterns #8 Morning Star: This formation is considered a three day bullish reversal pattern that consists of a long bodied black first day, a short gap down second day, followed by a third long white bodied candle, which closes above the midpoint of the first day.

The top 10 candlestick patterns #9 Piercing Line: This is a two-day formation considered to be a bullish reversal. The first is a continuation of a downtrend with a long black body. The second day opens at a new low, but closes above the midpoint of the previous days trading.

The top 10 candlestick patterns #10 Shooting Star: The opposite of the Hammer, this is a one-day formation and occurs in an uptrend. Trading opens higher and trades much higher but prices end near the low. This pattern is viewed as a bearish reversal. So when it comes to understanding and applying high probability candlestick patterns to your trades, be sure and start with these top 10 candlestick patters ad they are the big money makers and the most reliable of all the patterns.

Top 5 Most Consistent Candlestick Patterns

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Top 5 Most Consistent Candlestick Patterns

Some say the power of candlesticks partially stems from a self-fulfilling prophecy. The tremendous volume of traders who utilize candlestick charts translate into predictable market movements based upon certain formations. The truth is however thats a bunch of BS the reason they work is because they pinpoint the underlying emotions of the market as a whole. The following top 5 five candlestick formations are the most popular among technical analysts, and, therefore, have the highest probability of producing the most reliable and consistent results.

Top 5 Most Consistent Candlestick Patterns

When is comes to the Top 5 Most Consistent Candlestick Patterns these take the cake Doji Formations Doji formations, such as dragonfly and tombstone, are widely regarded as strong indicators of a probable reverse. They both consist of a single horizontal line indicating that both the closing and opening prices were identical. As a result, there is no body, and the wick is either rising for a gravestone Doji or falling for a dragonfly Doji. The gravestone pattern implies depleted bullish sentiment and, consequently, a downward movement will subsequently appear. A dragonfly pattern is naturally an opposite bullish type of signal. Piercing and Cloud Cover Formations Both of these formations are basically mirror images of each other and represent reversal signal patterns. The piercing pattern consists of a long black candlestick followed by a long white one that closes over halfway up the first candlestick. The implication is that market participants, who sold on the first day in anticipation of a continuing downward movement, had to cover their shorts, and, as a

result, prices rose and will likely continue in that direction. The cloud cover pattern, on the other hand, is a bearish indicator for similar reasons and is formed by a long white candlestick followed by a long black one that closes over halfway below the first candlestick. Engulfing Formations This pattern and the doji candlestick are likely top on the list of the Top 5 Most Consistent Candlestick Patterns. The bullish engulfing formation consists of a short blackbody candlestick followed by a taller white bodied candlestick that begins below and ends above the previous days trading range.This means prices on the second day opened lower than the first and closed higher. This is a highly bullish formation and indicates a long position should be considered. A bearish engulfing pattern would be the opposite with a short white bodied candlestick followed by a longer black bodied candlestick. Here the signal is bearish and consideration should be made for selling short. Hammer and Shooting Star Formations These patterns are basically short candles with one long wick. For the hammer, the wick points downwards, whereas for the shooting star, it points upwards. The hammer is considered bullish in that price action clearly was able to reverse all selling sentiment, while the shooting star would be viewed as bearish for a similar reasoning logic. Harami Formations A bullish Harami consists of a long black candlestick with a close near the low, followed on the next day by a short white candlestick. This indicator is interpreted as signaling that selling pressure dominated the market on the first day, but was halted on the second, suggesting that upward movement in prices will continue. A bearish Harami has the exact opposite structure and interpretation.

Top 5 Most Consistent Candlestick Patterns

When it comes to what can be relied on almost all by itself without any other technical indicators it is definitely these 5 patterns. When it comes to the Top 5 Most Consistent Candlestick Patternsyou can almost always count on these candlestick patterns.

Trade Stocks
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Trade Stocks
The keys to success in trading stocks Trading stocks is a new beast. There was once a time where one could take his retirement and place a few bucks here and there in some good ole blue chip stocks and in 10 years WALA he would have a million dollars in the bank. Wasnt hard for many years. You had a good job, you self directed your IRA and BAMO you were independently wealthy in a decade. If you could trade stocks you could be rich. I knew a boat load of dummies that made a fortune trading stocks. Things are different now. Different than they ever have been before. Gone are the

days where you could trade stocks with a handful of blue chips, leave your money in for the long haul and make a killing. LONG GONE in fact. Luck is no longer a solid strategy when you trade stocks. Gone are the days of long term BUY AND HOLD!

Trade Stocks With Candlestick Patterns

If you are going to trade stocks in todays stock market, whether its options or stocks alone, you need a solid strategy that includes signals and trigger entries, multiple time frames and a few solid indicators. Lets get into it. This is just enough information to give you a solid understanding of whats required and enough to get you into trouble trading stocks, so make sure you use this information for educational purposes only, more specifically on a paper trading account. lets define the difference between a signal and a trigger because this is a critical component to a solid strategy. A signal is an area on a chart where you have identified a red flag. A place where you have said when price reaches this point I should pay attention. The key is PAY ATTENTION and NOT to enter a trade. The trigger is where you enter. You have received a solid signal, you have identified your trigger, and then and ONLY THEN, do you enter the trade. Lets take a look. In the diagram below my signal was price hitting the black resistance line. My trigger was the low of the first candlestick in the swing high as indicated below.

Notice that it is possible to get a signal and then not get a trigger. In this case our trigger was set-up so that if the trigger hit it would confirm the new direction. If your going to trade stocks with a high % of success you need to clearly identify what represents a signal and what represents a trigger. In this way you will be able to improve your system over time. Without clear and precise entry and exit rules you will have nothing to improve and modify in your attempt to attain higher returns. Formulate a plan before you start to trade stocks and you will have a much greater chance of succeeding. You can use the form above to enhance your stock trading plan and learn. Heres a plan you can use to start with. A plan you can change and adapt to suite your style and risk tolerance. Also keep in mind that a trigger is a very personal thing. We all may share a signal but a trigger has everything to do with how much risk your putting on the table. We can take the same trade and your trigger may be a bit different than mine. Your trigger may be the close of the candlestick as indicated above OR it may be when the next candlestick closes below that candlestick. The give and take is two fold.

Trade Stocks with Candlestick Patterns

One is your entry relative to your stop A direct reflection of the risk you have in the trade, and the other is the move you miss by waiting for more confirmation. Then of course once the move is in full force its harder to get a good fill and the spread between the bid and ask is accelerated and therefore you dont make as much money. So when you trade stocks this stuff is critical in your signal and trigger decision process. When you trade stocks you need to consider first your entry relative to your stop this is directly related to what you will call your trigger. Fore example

If we said that our signal was the lower black support line, we could say that the green line is the trigger. The green line represents the high of the first candlestick to touch the black line. The candlestick is indicated by the red arrow. So we could put our stop at the RED LINE and our TRIGGER entry is the green line. The difference between the green line and the red line is our risk. Now take a look at the same set-up from a different perspective / trigger. Same signal different trigger.

In this case we use the same signal indicated by the red circle. Right when price hits support we say to ourselves OK, this might be a trade. In this case it takes 5 days to make it to our trigger which is the previous swing high resistance. Once price penetrates this level we will have our trigger. This is how you trade stocks. The beauty of this trade trigger is that once price penetrates this AREA this line becomes support immediately. If that support line is broken the trade is no longer valid and a stop equal to or slightly lower than this area is appropriate for a stop resulting in MINIMAL loss in this trade. Trade stocks like this and prosper. These are the beginnings to long term wealth in trading stocks. Trade stocks conclusion; when it comes to trading stocks you just need some rules to follow, these rules should include a close look at swing structure and always consider candlestick patterns.

Volatility and Candlestick Patterns

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Volatility and Candlestick Patterns

Where there is volatility, there are candlestick patterns. Whereas volatility can be unnerving for your portfolio, it is precisely these price fluctuations that present profit opportunities. With candlestick patterns, you can accurately assess the movements in the market, giving you profitable entries and exits. Movements predict profits The inherent volatility that exists in trading markets gives investors the opportunity to produce trading returns. Volatility and candlestick patterns go hand in hand, a volatile market creates opportunities with every sharp movement. What separates the professionals from the amateurs, in terms of investment success, are the tools that are utilized in order to produce the returns desired. The direction of movement is irrelevant, as an investor can profit from rising or falling prices, by either going long or short. The recognition of the meaning of candlestick indicators will allow the successful navigation of volatile markets. The reason this is true is that these techniques are centuries old and have been used by the most successful traders and investors in every type of market. Volatile markets simply represent increased opportunities as the price movement changes are greater. The rationale behind candlestick signals holds that prices in any market are greatly dependent on the psychology and emotional state of mind of those involved in the market. These emotions are at their highest point during volatile situations, and, as a result, candlestick analysis becomes even more significant.

Volatility and Candlestick Patterns Emotions

The attraction of candlestick signals to the investor lies in the fact that these indicators are relatively easy to recognize and have been proven that when properly utilized, they are an invaluable tool in determining how and when to undertake a position in any type of market. Scores of patterns can be

distinguished and have been used as extremely accurate tools by some of the most successful market traders to determine the psychological and emotional sentiment within a market, and to complement other techniques in order to develop strategies producing successful results. Few, if any, investors who based their decisions upon technical analysis tools did not include candlestick formation patterns into consideration before placing orders into the market. As volatile markets reflect upon the strong emotional character of the traders during this time, and candlestick patterns by their design measure market sentiment and emotion, they become particularly important to successfully trade volatile markets.

Volatility and Candlestick Patterns The Keys to Price Movement

Volatility and candlestick patterns and their keys to success in their utilization for trading purposes, is to be able to properly recognize individual pattern formations and understand how they reflect upon trading activity. Once this has been accomplished, trades can be placed that have a high probability of successful results because optimum points of entry and exit have been identified. Candlestick chart analysis is a proven technique for investment success, even in volatile markets. It is well worth the consideration of any individual wishing to produce profitable results by trading. Used in conjunction with other tools and signals, they can only help improve the returns of investment activity. Keep in mind that volatility literally refers to movement. Boiling water is volatile water, while cool water is not. When it comes to volatility and candlestick patterns this refers to a market that is nicely moving and printing highly predictable candlestick patterns.

What Are Candlestick Patterns

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What Are Candlestick Patterns?

What are candlestick patterns? Candlestick chart patterns offer independent investors and financial institutions a way to look at price fluctuations from a unique perspective. These charts are most commonly used for day trading stocks, commodities, and currency (forex). However, they can actually be used effectively by any investor in any market. A specific set of well-known candlestick patterns reveal overall market sentiment at any given time. They can also indicate the future direction of trading over the short term. A daily chart that displays candlesticks can incorporate other traditional indicators such as moving averages and Bollinger bands. Using candlesticks rather than just a daily average or closing price can give you a better feel for the direction or flow of the market. Thats because intraday fluctuations are revealed within a wider range of longer term data. This additional information can make a significant difference in your ability to make smart trading decisions. So if your wondering just what are candlestick patterns the truest and simplest answer is they are the nest way for you to see what price might do next. What are candlestick patterns Chart Basics The candlestick chart gets its name from the vertical rectangles featured on the diagram. They look like multiple candles in a row. Each stick represents a specific time period of trading. Typically, this is a whole day per candle. However, sticks can represent any relevant time span (5 minutes or 1 hour for example) as long as they are consistent throughout the chart and appropriately labeled for the end user. White candles represent a day when the closing price was higher than the opening price. Black candles represent the opposite a day when the price ended lower than when it started trading. The main body of the candlestick shows the range of trading between the opening and closing prices. Each candle may or may not have a shadow. This is depicted by a vertical line extending above or below the ends of the candle itself and is sometimes referred to as the wick. The shadow gives additional information about the extent of trading throughout the days session. It represents a price range where the stock traded during the day that was outside the range between the opening and closing prices. Although important, the shadow tends to hold less significance than the main body of the candle. You should take both into account to achieve a reliable interpretation of what is actually happening in the market. What are candlestick patterns Pattern Basics If you are at the point where you are asking what are candlestick patterns then a good place to start is with the top 10 candlestick patterns. Patterns are created by the makeup of individual candles and the differences (or similarity) in multiple sticks in succession. These give you important clues about how the majority of relevant investors feel toward that particular investment vehicle. Prices tend to follow the opinions of the crowd. These sentiments can change drastically over a short period as relevant news is released. Candlestick chart patterns are a graphical

indication of investor sentiment and the publicly known information about the investment over a given time frame. Of course, not everyone receives news at the same time or digests it at the same rate. As more and more traders incorporate available information into their decision making process, this will be reflected in the chart as they buy or sell. If you can read the patterns in the chart, you will have a good idea of which direction the price is about to go. Correct interpretation of candlestick charts depends on:

The size and shape of the individual candles within the relevant time span The time frame and type of trading involved The current price trend indicated in the chart The distinctive pattern created by multiple candles in a row The historical significance of those patterns in forecasting price movements accurately The ability to recognize a given pattern within the chart

What are candlestick patterns Fortunately, there arent too many candlestick patterns you have to memorize as a beginner to effectively use this type of chart. Start with these 12:
Evening Star Doji Spinning Top Three Crows Abandoned Baby Harami Inverted Hammer Piercing the Line Engulfing Pattern The Hammer Three Soldiers Dark Cloud Cover

What are candlestick patterns ? You can understand most candlestick patterns through building a solid knowledge of trends, support, resistance, and the breaking or holding of those lines through changes in price. In short, you dont have to actually memorize the names of these patterns to know what they mean. However, knowing them by heart and being able to instantly recognize them by sight will save you from having to figure out the reason for each upcoming tend. It will also help you feel more confident in your predictions and allow you to move swiftly to take advantage of trading opportunities.